More media companies settle with commission in collusion case

More media companies settle with commission in collusion case

Ujuh Reporter

Two more media companies; Mediamark and United Stations, who were part of a cartel like structure, Media Credit Co-Ordinators (MCC), that fixed advertising prices; have opted to settle with the Competition Commission. They are joining a growing list of media companies that are settling with the commission in a scandalous case involving well known names like DSTV, Independent media, Caxton, Media24, Primedia, Avusa Media (Tiso Blackstar Group) and The Mail & Guardian.

The Commission announced yesterday that it has referred to the recent settlement with the two companies to the Competition Tribunal (Tribunal) for confirmation.

Mediamark has agreed to pay an administrative penalty of R1 013 803.94 (one million and thirteen thousand, eight hundred and three rand and ninety-four cents) and United Stations will pay R423 920.73 (four hundred and twenty-three thousand, nine hundred and twenty rand and seventy three cents).

This brings the total number of companies that have settled in this matter to eight.

To date, the companies below have entered into settlements on this case:

MEDIA COMPANY

ADMINISTRATIVE PENALTY (FINE)

1 DStv Media Sales (Pty) Ltd R22 262 599.00
2 Independent Media (Pty) Ltd R2 220 603.00
3 Caxton & CTP Publishers and Printers Ltd R5 806 890.14
4 Provantage Media R1 094 222.00
5 Media24 R13 828 892.26
6 MTV Networks Africa (MTV) R966 692.83

 Remedies

Both companies have also agreed to a package of remedies, including:

  • Economic Development Fund contributions. Mediamark will contribute R364 969.42 (three hundred and sixty four thousand, nine hundred and sixty nine rand and forty-two cents) and United Stations R152 611.46 (one hundred and fifty two thousand, six hundred and eleven rand and forty-six cents);
  • Providing 25% in bonus advertising space for every Rand of airtime bought by qualifying small agencies (which meet the criteria in the Broad Based Black Economic Empowerment Act) for three years. Mediamark will provide space of R2 500 000.00 (two million five hundred thousand rand) annually while United Stations will provide R1 500 000.00 (one million five hundred thousand rand) annually;
  • Full cooperation with the Commission in the media collusion case until all litigation is finalised; and
  • Development, implementation and monitoring of a competition law compliance programme as part of their respective corporate governance policies.

 Economic Development Fund contributions to date

 

MEDIA COMPANY FUND CONTRIBUTION (REMEDY)
1 DStv Media Sales (Pty) Ltd R8 000 000.00
2 Independent Media (Pty) Ltd R799 417.00
3 Caxton & CTP Publishers and Printers Ltd R2 090 480.45
4 Provantage Media R393 920.12
5 Media24 R4 978 401.21
6 MTV Networks Africa (MTV) R348 009.42

 Background

 The case relates to a November 2011 investigation which found that, through the Media Credit Co-Ordinators (MCC), various media companies agreed to offer similar discounts and payment terms to advertising agencies that place advertisements with MCC members.

The Commission found that the practices restricted competition among the competing companies, as they did not independently determine the discounts and thereby fixed the price and trading terms in contravention of the Competition Act.

Media companies listed in the matter

  • SABC (SOC) Limited;
  • Media 24 Ltd; Media 24 Magazines; (settled)
  • Independent Newspapers (Pty) Ltd; (settled)
  • The Mail & Guardian (Pty) Ltd;
  • Avusa Media Limited;
  • DSTV Media Sales (Pty) Ltd; (settled)
  • MTV Networks Africa (Pty) Ltd; (settled)
  • Primedia (Pty) Ltd;
  • Primedia Outdoor (Pty) Ltd;
  • Cinemark (Pty) Ltd;
  • Comutanet (Pty) Ltd;
  • Conde Nast Independent Magazine;
  • Caxton and CTP Publishers and Printers Ltd and the Citizen 1978 (Pty) Ltd; (settled)
  • Spark Media (Pty) Ltd;
  • Apurimac Media;
  • Provantage Media (Pty) Ltd; (settled)
  • Mediamark (Pty) Ltd; (settled)
  • Carpe Diem Media;
  • Rodale And Touchline;
  • Mandla-Matla Publishing (Pty) Ltd;
  • Ramsay Media;
  • Lugan Investments (Pty) Ltd;
  • Associated Media (Pty) Ltd;
  • Associated Hearst (Pty) Ltd;
  • Capro (Pty) Ltd;
  • Trudon (Pty) Ltd;
  • United Stations (Pty) Ltd; (settled)
  • Continental Outdoor (Pty) Ltd;
  • Apurimac Media CC; and
  • Media Credit Co-Ordinators (MCC).

Emerging black media operations are most likely the worst affected by the practice cited in this case. Attracting advertising revenue for a new media operation becomes impossible in an environment where a group of established operators, represented by like minded people, seat around the table to arrange kick backs, otherwise known as rebates or discounts.

news@ujuh.co.za

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